Telegraph: ‘millions of pounds of government money [for] 14 French vineyards’

UK publication The Telegraph just published a story about hundreds of millions of yuan of government funds being spent on vineyards in France:

Chinese government funds have been squandered on French vineyards and secret trips to Las Vegas, Communist Party auditors revealed on Wednesday.

In the latest attempt by Beijing’s spin doctors to promote President Xi Jinping’s high profile “war” on corruption, the National Audit Office announced that its investigators had solved more than 314 major cases last year.

The most startling revelation was that millions of pounds of government money had been used to snap up 14 French vineyards.

Apparently two companies used the public money to buy vineyards in Bordeaux, including a firm from Dailian that moved over a quarter of a billion yuan (£25 million).:

One of those companies was the Haichang Group, a firm that made its money in oil and now operates a variety of businesses including marine theme parks and golf clubs, and has blazed a trail for China’s growing investment in French vineyards.

The company, which also sponsors the Dalian International Wine & Dine Festival, had acquired up to 10 properties in Bordeaux by 2013 with plans for 15 more, according to wine industry magazines, though three of them were reported to have been put up for sale last year.

See the full story here.

The government crackdown has had a major impact on wine sales in China. Many distributors have seen steep declines in revenue due to spending cuts on top (usually Bordeaux) wines by government accounts. As I wrote in this piece in Wine Business International, this situation has shifted the focus toward regular consumers.

See also:

• Yellowtail fail: Aussie wine helps get Chinese official in trouble
• Bonus edition: China wine market predictions in Year of the Horse

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